The previously reported diphenyl 1-(S)-prolylpyrrolidine-2(R, S)-phosphonate (5) was used as a lead compound for the development of potent and irreversible inhibitors of dipeptidyl peptidase IV (DPP IV, EC 3.4.14.5). The synthesis of a series of diaryl 1-(S)-prolylpyrrolidine-2(R,S)-phosphonates with different substituents on the aryl rings (hydroxyl, methoxy, acylamino, sulfonylamino, ureyl, methoxycarbonyl, and alkylaminocarbonyl) started from the corresponding phosphites. A good correlation was found between the electronic properties of the substituent and the inhibitory activity and stability. The most striking divergence of this correlation was the high potency combined with a high stability of the 4-acetylamino-substituted derivative 11e. This compound shows low cytotoxicity in human peripheral blood mononuclear cells and also has favorable properties in vivo. Therefore bis(4-acetamidophenyl) 1-(S)-prolylpyrrolidine-2(R,S)-phosphonate (11e) is considered as a major improvement and will be a highly valuable DPP IV inhibitor for further studies on the biological function of the enzyme and the therapeutic value of its inhibition.